Bitcoin's recent price increase has been met with caution as experts warn of a potential significant decline. The cryptocurrency has risen by 1.87% in just 24 hours and 3.61% over the past week, currently trading at approximately $109,192. Veteran trader Peter Brandt suggests that these gains might be setting the stage for one of the largest crashes in years.
Brandt's analysis indicates that Bitcoin could experience a drop of up to 75%. If this scenario unfolds, the current price of $109,800 could plummet to around $27,290, a level reminiscent of the lows seen in early 2023. Such a decline would erase a substantial amount of value, reversing over two years of growth. Few investors appear to be prepared for such a drastic downturn.
Brandt draws parallels to the market dynamics of 2022, where Bitcoin reached peaks of $65,000 in April 2021 and $69,000 in November 2021, only to fall sharply into a bear market, losing more than half its value. This time, Bitcoin has seen highs above $108,000 in December 2024 and January 2025 before dropping below the $100,000 mark. After a brief recovery to around $112,000 last month, BTC may now be poised for a similar decline.
Key technical indicators are signaling potential trouble, with the 9-period Exponential Moving Average (EMA) crossing below the 21-period EMA on the daily chart. Historically, this crossover has preceded significant downtrends. Traders will be closely monitoring whether Bitcoin can maintain its position above both EMAs for an extended period. A failure to reclaim the $108,000 level could act as a major trigger for panic selling.
Market reactions are mixed, with derivatives data leaning toward a bearish outlook. Trading volume surged nearly 30% to $100 billion, accompanied by a 1% increase in open interest. On exchanges such as Binance and OKX, long/short ratios are approximately 0.5501 and 0.53, indicating a higher number of short positions compared to longs. This crowding could lead to a short squeeze if a crash does not materialize soon, but it may also backfire if Bitcoin manages to hold above key support levels.
In terms of capital flows, Bitcoin-related funds experienced outflows of nearly $57 million in the past week, which, while significant, represents less than 0.2% of the approximately $50 billion in assets under management. In contrast, Ethereum products attracted $295 million, suggesting that while some capital is leaving Bitcoin, it is mostly being redistributed within the cryptocurrency market rather than exiting entirely.
Currently, Bitcoin finds itself at a critical juncture. Traders must decide whether it will break through support levels and decline toward the mid-$20,000 range or overcome bearish sentiment and climb higher. The $108,000 area will be pivotal in this decision-making process. According to Brandt, a 75% drop could catch many unprepared investors off guard, highlighting the importance of risk management and tight order placements in this volatile market.